In the coming months, Insightview does not necessarily see an increasing number of Covid cases in Europe and the United States as the biggest threat to the ongoing economic recovery. This website is far more worried about the "inflation impact" of a deteriorating Covid situation in China. In the last few days, Insightview has talked to sources in China. They see an increased risk of more severe lockdowns linked to the Delta variant. [Read also the article, Israel's worrying fourth wave.]  
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‌Beijing and the rest of the world have good reasons to worry. China could be forced to respond more aggressively to new outbreaks because the Delta variant is more contagious - and Chinese vaccines are, apparently, not as effective as, for instance, vaccines from Pfizer-BioNTech or Moderna. ‌This is already having consequences, as there is a shortage of container port capacity in China, which the latest Covid outbreaks have reinforced. [Read the Fortune article, How harsh are China’s COVID restrictions? A single infection closed the world’s third-busiest port.] This is a problem, which will get worse in the coming winter months.
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‌The above could have significant consequences in the United States and Europe, as inventories are far too low. This was also evident in yesterday's business sales report, which showed retailers' inventories-to-sales at an all-time low in June. ‌Perversely, the situation has been made worse by a catastrophic policy mix, as Washington continues launching new fiscal stimulus measures. 
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‌Insightview still believes that the above will create "transitory inflation for longer". The latest ISM survey showed that the net share of "customers assessing inventories for being too low" stood at a record level. Interestingly, at the same time, the backlog of orders stood close to an all-time high, according to the latest manufacturing ISM survey. 
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‌The above also means that the global bottlenecks will not go away. Instead, the Delta variant will worsen the mismatch between the supply and the demand sides. The imbalances will only disappear if either fiscal or monetary policymakers react as they were "supposed to" in the first place. Perversely, the US Federal Reserve has not yet responded, although it is probably only a question of when. [Read also yesterday's CNBC article, Top Fed official warns massive bond purchases are ill-suited for US economy.]
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‌A few words about Afghanistan, China and rare earth metals
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‌The catastrophic exit of Western powers from Afghanistan has further "elevated" the status of China without Beijing having to do anything. This could provide China access to even more rare earth metals, although it is not a "free lunch" getting too involved with Afghanistan. [Read the CNBC article, China may align itself with Taliban and try to exploit Afghanistan's rare earth metals: analyst.]  ‌Also, Beijing has used the "United States running away from Afghanistan with its tail between its legs" as a warning to Taiwan when it comes to having Washington as an ally. [Read also the SCMP article, Afghan chaos left by US should be a warning to Taiwan: Chinese media, and ABC net news article, Chinese warships and fighter jets conduct drills off Taiwan in what Beijing says is response to 'provocations'.]
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‌17. August 2021 - Vacation: There will be no updates from August 23 to September 3, 2021
‌17. August 2021 - USA: The July retail sales report disappoints, but it is difficult to say whether this is caused by higher inflation, Covid or a shortage of supply
‌17. August 2021 - Britain: The labour market recovers strongly. The share of companies 'planning to hire' and 'unfilled vacancies' jump to the highest level on record
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